Kaib's Roving R. Ph. Agency, Inc. v. Smith
239 P.3d 247, 31 I.E.R. Cas. (BNA) 790, 237 Or.App. 96 (2010)
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Rule of Law:
A compilation of information can qualify as a trade secret, even if its individual components are publicly available, provided the compilation itself derives economic value from not being generally known and is subject to reasonable efforts to maintain secrecy. The determination of whether information constitutes a trade secret is a question of fact, making it generally unsuitable for resolution on summary judgment when material facts are in dispute.
Facts:
- Kaib's Roving R.Ph. Agency, Inc. (plaintiff) operates a business providing temporary, or 'relief,' pharmacists to pharmacies.
- In August 2006, pharmacist Zane Smith contacted Kaib's to express interest in working for the company.
- Kaib's president shared extensive business information with Smith, including operational processes, client-specific requirements, billing rates, and strategies for maintaining pharmacists' independent contractor status.
- This information was compiled over many years and presented to Smith through phone calls, emails, and a packet of written materials.
- In October 2006, Smith signed and returned a work agreement with Kaib's that included a provision agreeing not to disclose any 'confidential company information relating to [plaintiff's] method of doing business'.
- After signing the agreement, Smith worked one shift as a relief pharmacist for Kaib's.
- In November 2006, Smith filed Articles of Incorporation to form RPH Relief, Inc., a competing relief pharmacist business.
Procedural Posture:
- Plaintiff Kaib's Roving R.Ph. Agency, Inc. filed a lawsuit against defendants Zane Smith and RPH Relief, Inc. in an Oregon trial court.
- The lawsuit alleged claims for misappropriation of trade secrets, breach of contract, and other related causes of action.
- Defendants filed a motion for summary judgment, arguing that the information at issue did not qualify as a trade secret as a matter of law.
- The trial court granted the defendants' motion for summary judgment, dismissing all of plaintiff's claims.
- Plaintiff, as the appellant, appealed the trial court's judgment to the Court of Appeals of Oregon.
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Issue:
Is the determination of whether a compilation of business information constitutes a trade secret a question of fact, making summary judgment improper when there are conflicting affidavits regarding the information's economic value and secrecy?
Opinions:
Majority - Schuman, J.
Yes. The determination of whether information is a trade secret is a question of fact that is ordinarily best resolved by a fact-finder after a full presentation of evidence. The trial court erred in granting summary judgment because there were genuine issues of material fact regarding whether the plaintiff's information constituted a trade secret. Under Oregon's Uniform Trade Secrets Act, a 'compilation' of information can be a trade secret if the compilation itself derives economic value from not being generally known and is subject to reasonable secrecy efforts. It is the compiled information as a whole, not its individual components, that must be evaluated. Here, the plaintiff presented affidavit evidence that its information was compiled over 20 years at great expense and had economic value, while the defendants presented affidavits claiming the information was common knowledge. This conflict creates a disputed issue of material fact that a jury must decide, making summary judgment inappropriate.
Analysis:
This decision reinforces that the existence of a trade secret is a fact-intensive inquiry, making it difficult to resolve such claims at the summary judgment stage. The court clarifies that under the Uniform Trade Secrets Act, the focus is on the value of the compiled information as a whole, not whether each individual piece of data is independently secret. This protects businesses that invest significant resources in organizing publicly available information into a valuable and proprietary format. The ruling provides a shield against defendants who might try to defeat a trade secret claim early in litigation by merely asserting that the underlying information is 'readily ascertainable,' forcing the dispute to be resolved by a fact-finder.
